TLJ News from September 26-30, 2013

USPTO to Remain Open in Event of No Appropriations Continuing Resolution

9/30. The U.S. Patent and Trademark Office (USPTO) announced in a statement that "In the event of a general government shutdown on October 1, 2013, the United States Patent and Trademark Office will remain open, using prior year reserve fee collections to operate as usual for approximately four weeks."

It added that "We continue to assess our fee collections compared to our operating requirements to determine how long we will be able to operate in this capacity during a general government shutdown." The USPTO added that "Should we exhaust these reserve funds before a general government shutdown comes to an end, USPTO would shut down at that time, although a very small staff would continue to work to accept new applications and maintain IT infrastructure, among other functions."

FTC Shutdown Plan Provides for Continuing Operation

9/30. The Federal Trade Commission (FTC) released a document [10 pages in PDF] titled "Shutdown of Federal Trade Commission Operations Upon Failure of the Congress to Enact Appropriations".

The plan reflects that the FTC would put off what can be delayed, including by seeking extensions of court dates and deadlines, and use excepted employees to continue to perform what cannot be delayed. Hence, if the Congress does not enact a continuing resolution, this would not create opportunities to slip anticompetitive mergers past an empty FTC bound by Hart Scott Rodino (HSR) deadlines.

Some activities would be suspended. The plan states that the FTC "will not process FOIA requests; and does not anticipate engaging in rulemaking; dealing with ethics issues or, unless required to do so by reason of a court not continuing litigation deadlines, defending EEO or other suits against the agency; engaging in economic research; pursuing its on-going studies; issuing reports and guides; attending or conduct workshops, roundtables, hearings or conferences; or making its views known through letters or comments to other agencies."

It states that within one half day of expiration of appropriations, the FTC would have furloughed all employees, except those "1) performing work to address a threat to human life or property of such a nature that immediate action is necessary; 2) involved in the orderly shutdown of agency operations or otherwise performing duties where there is necessarily an implied authority to continue certain functions; or 3) otherwise allowed by operation of law."

The FTC plan states that about 253 of its 1,178 employees would be excepted, most under the threat to life or property exception.

Bureau of Competition. This plan states that FTC's Bureau of Competition's (BOC) Premerger Notification Office "will be open but very limited HSR staff will be excepted from furlough as necessary to accept new filings and to organize those filings."

However, the FTC construes broadly its authority to continue HSR operations during a shutdown. First, the plan states that employees are excepted if their work is necessarily implied by law. The FTC plan concludes that "Because the parties have a statutory right to file their Premerger Notification Reports, the Agencies have an implied responsibility to have adequate staff on hand to receive and promptly process the filings."

"To the extent that the circumstances of a reported merger or acquisition indicate that a failure by the government to challenge the transaction before it is consummated will result in a substantial impairment of the government’s ability to secure effective relief at a later time, the Commission will continue HSR investigations during the pendency of a shutdown."

But, "all non-merger investigations will be suspended during the pendency of a shutdown."

And as for matters in litigation, the FTC "will notify opposing parties and courts of the government shutdown, and request suspensions of dates for trials, hearings and filings, or similar relief to preserve the government’s claim".

The plan notes that "Should a court deny a Commission request for an extension due to the shutdown, the Commission’s failure to continue to pursue its claims or defenses in the litigation will be a substantial impairment of the government’s legal interests and may foreclose its ability to vindicate its position at a later date."

Consumer Protection. The plan states that "In the event of a shutdown, the Commission will seek continuances in all BCP cases in which preliminary relief has been obtained, as appropriate. Attorneys in those cases or where there is no plan to seek preliminary relief, will notify opposing parties and courts of the government shutdown, and request suspensions of dates for hearings and filings, as appropriate."

"Pending the responses from the courts (including non-responses), staff may have to continue working in order to meet upcoming deadlines and protect the Commission’s interests in the litigation. Excepting such staff from furlough is essential to protect the Commission's rights and interests in the litigation." (Parentheses in original.)

Other Bureaus and Offices. The plan states that up to 33 of the 114 Bureau of Economics staff "might be excepted from furlough to support on-going litigations if the courts do not grant requested extensions, which number includes the Director of BE and three front office employees to supervise the work."

In the Office of General Counsel, "The General Counsel, his principal Deputy, and up to one other attorney at any given time would be excepted from furlough to support excepted law enforcement personnel who would be working and to work with the Chairwoman and the Executive Director to manage the agency during the shutdown. As many as three additional attorneys, at any given time, from the Office of the General Counsel might be excepted from furlough to handle any emergency appeals that might need to be filed or handle pending cases where a motion for stay is denied."

The plan states that "as many as six employees will be exempted from furlough to continue to work to ensure the integrity and security of the agency’s IT infrastructure and its availability for use by exempt employees pursuing excepted and essential law enforcement actions during the shutdown".

More News

9/30. The Federal Communications Commission (FCC) published a notice in the Federal Register (FR) that sets deadlines to submit comments in response to its Notice of Proposed Rulemaking (NPRM) that proposes to require that digital technologies, including Terrestrial Trunked Radio (TETRA) based technologies, comply with Emission Mask H when operated in the 800 MHz National Public Safety Planning Advisory Committee (NPSPAC) band 806-809 & 851-854 MHz. Initial comments are due by November 14, 2013. Reply comments are due by November 29. FCC adopted this NPRM on August 23, 2013, and released it on August 27. It is FCC 13-117 in PS Docket No. 13-209 and RM-11663. See, FR, Vol. 78, No. 189, September 30, 2013, at Pages 59903-59906.

NYT Reports Snowden Documents Show that NSA Graphs Social Connections and Whereabouts of Americans

9/28. The New York Times (NYT) published a story by James Risen on September 28, 2013 titled "N.S.A. Gathers Data on Social Connections of U.S. Citizens". It states that the National Security Agency (NSA) "began allowing the analysis of phone call and e-mail logs in November 2010 to examine Americans' networks of associations for foreign intelligence purposes after N.S.A. officials lifted restrictions on the practice, according to documents" provided by Edward Snowden.

The article also states that documents provided by Snowden show that the NSA also uses "bank codes, insurance information, Facebook profiles, passenger manifests, voter registration rolls and GPS location information, as well as property records and unspecified tax data".

The article states that consequently, the NSA has been able to "create sophisticated graphs of some Americans' social connections that can identify their associates, their locations at certain times, their traveling companions and other personal information".

People and Appointments

9/27. The U.S. Patent and Trademark Office (USPTO) published a notice in the Federal Register (FR) that announces members of its Performance Review Board (PRB). The members are Teresa Rea (acting head of the USPTO), Frederick Steckler (USPTO Chief Administrative Officer), Margaret Focarino (Commissioner for Patents), Deborah Cohn (Commissioner for Trademarks), Anthony Scardino (Chief Financial Officer), John Owens (Chief Information Officer), William Covey (acting General Counsel), and Shira Perlmutter (Chief Policy Officer and Director for International Affairs). The alternate members are Mary Denison (Deputy Commissioner for Trademark Operations) and Andrew Faile (Deputy Commissioner for Patent Operations). See, FR, Vol. 78, No. 188, September 27, 2013, at Page 59658.

More News

9/27. The Federal Communications Commission (FCC) released a short document [4 pages in PDF" titled "Plan for Orderly Shutdown Due to Lapse of Congressional Appropriations".

Reps. Latta and Green Introduce Bill to End FCC's Integration Ban

9/26. Rep. Bob Latta (R-OH) and Rep. Gene Green (D-TX) introduced HR 3196 [LOC | WW], an untitled bill that would end the Federal Communications Commission's (FCC) integration ban for multichannel video programming distributors (MVPDs).

The FCC created integration ban currently prohibit MVPDs from making available to consumers devices that contain both navigation of video content functions and security functions.

Rep. John Shimkus (R-IL) joined as a cosponsor on September 30. The bill was referred to the House Commerce Committee (HCC). All three sponsors are members.

This bill would amend Section 629 of the Communications Act, which is codified at 47 U.S.C. § 549, and which pertains to "Competitive availability of navigation devices".

See, full story.

FTC to Seek to Compel Disclosures by Patent Assertions Entities

9/26. The Federal Trade Commission (FTC) released a notice [17 pages in PDF], to be published in the Federal Register (FR), that announces that it seeks information on patent assertion entities (PAEs) and "other entities asserting patents in the wireless communications sector, including manufacturers and other non-practicing entities and organizations engaged in licensing".

This notice states that the FTC plans to issue compulsory process orders to PAEs and other entities. These orders, which are in the nature of subpoenas, will seek information regarding patent acquisition, litigation, and licensing practices. The FTC will seek written responses, and production of documents.

Before issuing such orders, the FTC will submit a request for review by the Executive Office of the President's (EOP) Office of Management and Budget (OMB), as required by the Paperwork Reduction Act (PRA), 44 U.S.C. §§ 3501-3521.

This notice recites the questions to be asked of PAEs. It is eleven pages in single spacing. This notice underestimates the costs of compliance to the entities that will be required to respond.

Ed Black, head of the Computer and Communications Industry Association (CCIA), stated in a release that "This vote by the FTC is an encouraging sign that the Administration is committed to investigating the practices of patent trolls, and we commend them on this step. While previous studies have estimated that PAEs cost the economy $29 billion, the ability to dig deeper into the numbers will be useful."

GAO Report. The Congress's Government Accountability Office (GAO) recently completed a related report [61 pages in PDF], as required by the patent reform act enacted in 2011.

Section 34 of the "Leahy-Smith America Invents Act", or AIA, mandated this report. The AIA act was HR 1249 [LOC | WW] in the 112th Congress. The GAO released its report on August 22, 2013.

See also, story titled "GAO Reports on Patent Litigation Trends" in TLJ Daily E-Mail Alert No. 2,592, August 29, 2013.

That GAO report relied upon entities voluntarily providing information, and hence, the GAO was hampered by lack of information on many key issues.

The FTC's study will be more focused (to just the wireless communications sector), and more thorough and systematic. However, the critical difference is that it will be based upon compulsory process.

More Information. The Department of Justice's (DOJ) Antitrust Division and the Federal Trade Commission (FTC) held a day long workshop on December 10, 2012, titled "Patent Assertion Entity Activities". See, DOJ web page for that event.

This FTC notice states that comments will be due within 60 days of publication of a notice in the FR. As of the October 2 issue of the FR, such notice had not yet been published.

This proceeding is FTC Project No. P131203.

DOJ Civil Rights Division Targets IBM for Online Job Ads that Sought H1B and F1Visa Holders

9/26. The Department of Justice (DOJ) and IBM entered into a Settlement Agreement [4 pages in PDF] regarding IBM's hiring practices for application and software developers.

The DOJ filed no civil or criminal complaint with the U.S. District Court. It filed no administrative complaint. Nor did IBM file any complaint against the DOJ. The parties merely entered into a short and vague agreement.

This agreement contains no recitation of factual allegations, or statement of a claim. It merely states that the DOJ investigated "potential citizenship status discrimination" under 8 U.S.C. § 1324b by IBM.

There is a reference in the mutual promises section to "job advertisements allegedly expressing a preference for non-immigrant temporary visa holders".

The DOJ's public relations office alleged in a release that IBM violated the statute "when it placed online job postings for application and software developers that contained citizenship status preferences for F-1 and H-1B temporary visa holders."

The DHS's U.S. Citizenship and Immigration Services (USCIS) issues F-1 visas to full time academic students at an accredited college, university, seminary, conservatory, academic high school, elementary school, or other academic institution or in a language training program.

The USCIS issues H-1B visas to foreign nationals with technical expertise in specialized fields. This visa program is used by technology companies to employ skilled tech workers. It is also widely abused, and fraud ridden.

The DOJ release adds that "IBM's job postings were for positions that would ultimately require the successful candidate to relocate overseas".

That is, the DOJ release recites a rationale and legitimate basis for seeking H1B and F1 visa holders. The jobs were for foreign positions, and H1B and F1 applicants already have foreign citizenship that would enable them to re-enter and work in their countries. The US is not the only country that builds burdensome and often irrational barriers to the free movement of skilled technology workers.

Under the agreement, neither IBM nor the DOJ admit wrongdoing.

However, IBM agrees that it "shall not discriminate on the basis of citizenship status or national origin in violation of 8 U.S.C. § 1324b", and similar terms, and that it will pay a fine of $44,400.

Section 1324 provides in part that "It is an unfair immigration-related employment practice for a person or other entity to discriminate against any individual ... with respect to the hiring, or recruitment ... of the individual for employment or the discharging of the individual from employment ... because of such individual's national origin".

The DOJ release discloses that IBM discriminated in favor of, not against, foreigners with H1B and F1 visas. Neither the release nor the agreement specify the target of IBM's possible discrimination. Hypothetically, it could be US citizens. Or, it could be foreign citizens who do not hold H1B or F1 visas. Or, it could be that the DOJ construes "discrimination against ... because of .. national origin" to include discrimination in favor.

This case was handled by the DOJ's Civil Rights Division's (CRD) Office of Special Counsel for Immigration Related Unfair Employment Practices.

The CRD has a history, particularly in the context of the Americans with Disabilities Act (ADA), of acting beyond its statutory authority, and without an understanding of the tech companies and products that it targets.

Neither IBM nor the DOJ promptly responded to phone calls or e-mail from TLJ.

FCC Adopts NPRM to Eliminate UHF Discount in National TV Ownership Rule

9/26. The Federal Communications Commission (FCC) adopted by a vote of 2-1 a Notice of Proposed Rulemaking (NPRM) [22 pages in PDF] regarding its regulation of media ownership.

This NPRM pertains to the FCC's national television rule, which limits any entity from owning TV stations that cumulatively reach more that 39 percent of TV households nationwide. The current rule counts TV stations on UHF channels (14 and above) differently from TV stations on VHF channels (13 and below).

The NPRM proposes changing the rule to end the current 50% UHF discount for the purpose of estimating a TV station's national audience reach. It states that "the DTV transition has rendered the UHF discount obsolete and it should be eliminated".

This NPRM contains the proposed rule change. It would merely delete the sentence that states the discount.

The NPRM also states that "the elimination of the UHF discount would impact the calculation of nationwide audience reach for broadcast station groups with UHF stations. We believe, however, that only a small number of broadcast station ownership groups have combinations that approach the current 39 percent ownership nationwide cap and that might exceed the cap if the UHF discount were eliminated. We therefore propose, in the event that we eliminate the UHF discount, to grandfather broadcast station ownership groups to the extent that they exceed the 39 percent national audience cap solely as a result of the termination of the UHF discount rule as of the date of the release of this NPRM. We also propose to grandfather proposed station combinations that would exceed the 39 percent cap as a result of the elimination of the UHF discount for which an application is pending with the Commission or which have received Commission approval, but are not yet consummated, at that the time this NPRM is released. Further, we propose that any grandfathered ownership combination subsequently sold or transferred would be required to comply with the national ownership cap in existence at the time of the transfer." (Footnotes omitted.)

This NPRM is FCC 13-123 in MB Docket No. 13-236. See also, FCC release.

Proposed Rule Change. 47 C.F.R. § 73.3555(e) provides in part that "No license for a commercial television broadcast station shall be granted, transferred or assigned to any party (including all parties under common control) if the grant, transfer or assignment of such license would result in such party or any of its stockholders, partners, members, officers or directors having a cognizable interest in television stations which have an aggregate national audience reach exceeding thirty-nine (39) percent."

It further provides that "National audience reach means the total number of television households in the Nielsen Designated Market Areas (DMAs) in which the relevant stations are located divided by the total national television households as measured by DMA data at the time of a grant, transfer, or assignment of a license. For purposes of making this calculation, UHF television stations shall be attributed with 50 percent of the television households in their DMA market."

The proposed text would delete the last sentence.

Pai Dissent. FCC Commissioner Ajit Pai dissented. He wrote in his statement that "I agree with my colleagues that the time probably has come for the UHF discount to take its place in the history books".

"Nevertheless, I am dissenting from this morning’s Notice of Proposed Rulemaking (NPRM) for two reasons", said Pai. "First, I believe that we cannot modify the UHF discount without simultaneously reviewing the national audience cap, which currently stands at 39 percent." (Footnote omitted.)

And second, he urged that "any combination that is in existence or pending with the Commission as of the date the UHF discount rule is eliminated should be grandfathered".

Upton and Walden. Rep. Fred Upton (R-MI) and Rep. Greg Walden (R-OR) stated in a release this NPRM undermines economic stability and job growth.

They wrote that this NPRM "reveals a startling failure to recognize the chilling effect of regulatory uncertainty and a disregard for the potential economic consequences of commission action. Rather than following the good process of adopting new rules and then applying them prospectively, as we suggested in a letter to the Acting Chairwoman, the FCC instead will apply as yet undefined rules to applications filed anytime after today."

They explained that "The practical reality of this decision is that the commission has created a regulatory purgatory for broadcasters between now, September 26, 2013, and whenever it gets around to adopting new rules – potentially sidelining countless jobs and billions of dollars in new investment. The FCC sadly failed in the ultimate effort to pursue policies that promote our economy and create jobs."

See also, story titled "Rep. Upton and Rep. Walden Urge FCC to Apply Change to National Television Rule Prospectively Only" in TLJ Daily E-Mail Alert No. 2,600, September 12, 2013.

People and Appointments

9/26. President Obama announced his intent to nominate Renée James to be a member of the President's National Security Telecommunications Advisory Committee. See, White House news office release. She is President of Intel.

More News

9/26. The Federal Communications Commission (FCC) and NTT DOCOMO USA entered into an agreement regarding compliance with the FCC's rules regarding hearing aid compatible mobile handsets. See, Order and Consent Decree [11 pages in PDF] and FCC release. This is the FCC's eighth such enforcement action this year. These rules are codified at 47 C.F.R. § 20.19.

9/26. The Government Accountability Office (GAO) released a report [61 pages in PDF] titled "Federal Information Security: Mixed Progress in Implementing Program Components; Improved Metrics Needed". This report evaluates the extent to which major federal agencies have implemented the requirements of Federal Information Security Management Act of 2002 (FISMA) as amended to ensure the effectiveness of information security controls over information resources that support federal operations and assets. It states that while agencies made progress in FY 2012, the GAO and inspectors general "continue to identify weaknesses in agencies' information security programs".